Health care ruling: Reforms good for some but failed to lower costs

The Supreme Court has ruled on the Affordable Care Act (ACA) and has determined that a key provision of the law, the individual mandate is constitutional, as a tax. The individual mandate will require that nearly every American citizen purchase health insurance, whether they want to or not, whether they believe in insurance or not, prefer to self-insure themselves or not, or face a fine. The fine itself is not likely to motivate most of the uninsured to purchase coverage, because the first year’s fine, on an annual basis, is only $95 or 1 percent of gross income, whichever is greater.

Since it appears that ACA will continue, and therefore the provisions within the law will be implemented, employers will now need to prepare themselves to be in compliance with requirements that many employers are not even aware exist.

There are upcoming requirements for reporting what they pay for their employees’ coverage, for adding the amount they pay for their employees’ coverage in a new area on their employees’ W-2. There are new fines for those employers that have 50 or more employees if they don’t provide coverage. There will be substantial fines for employers that don’t pay enough of their employees’ premium.

There are several provisions that are intended to generate additional tax revenue to offset some of the costs of the ACA. The law had been expected to cost an additional $1.2 trillion but was said to not add to the deficit. And that $1.2 trillion is only for the cost of the health care provided for in the law. That figure does not include all of the infrastructure costs that are created due to the ACA.

There are so many ways in which the health care and health insurance industries work together to provide efficient health care for Americans. Hospitals, physicians, labs, pharmacies and other medical providers across the country provide the health care, while the health insurance system helps to provide the ability to pay for those services when they are needed by ourselves and our families. We most definitely need to improve our health care and health insurance system. The goals that were supposed to be a part of the ACA – lowering the cost of health care, thereby lowering the cost of health insurance – are outstanding goals.

However, provisions to accomplish these goals did not make it into the ACA. Hospital administrators and many physicians will openly admit that much of today’s medicine is a practice of “defensive medicine” due to the potential of litigation.

There are good advances in the ACA that will offer better patient care through electronic medical records. The fact that adult dependent children may remain on their parent’s plan up to age 26 is a great positive. That children cannot be declined coverage due to a pre-existing condition and that lifetime and annual benefits maximums are no longer allowed are essential to providing the financial security that individuals and families need.

Also, in requiring that insurers pay for preventive care without the insured having to pay any portion of those costs is a real way to have people seek preventive care to keep themselves and their families healthier.

These are some of the positive provisions that will truly help Americans. In fact, in anticipation of the Supreme Court ruling, three of the largest insurers in the country had announced that even if the Supreme Court chose to strike down the ACA, they would voluntarily keep and abide by the positive provisions mentioned above.

As the provisions of the ACA move forward in 2014, all Americans will be guaranteed the right to buy coverage regardless of health problems or issues. They will also be required to purchase health insurance coverage if they do not have it. There are provisions that will affect health insurance rates such as using tobacco, as well as a maximum rate ratio that will enforce a maximum 3:1 range between a young person’s rate vs. an older person’s rate. The concept was intended to force lower insurance rates; however, it will most likely cause the increase of rates for younger Americans.

Clearly there are improvements needed in our health care system and health insurance financing system in our country and in California. However the ACA as it sits now hasn’t seemed to provide the affordability that it was intended to provide.

Crosby, a San Marcos resident and director of sales for Warner Pacific Insurance Services, is on the board of directors for the California Association of Health Underwriters and the National Association of Health Underwriters.